China’s PP/PE (polypropylene, polyethylene) industry is undergoing a capacity reshuffle, with key developments including the commissioning of BASF’s Zhanjiang polyethylene plant and progress on PetroChina Dalian Petrochemical’s new polyolefin projects driving the sector toward larger-scale, high-end production.
BASF (Guangdong)’s 500,000-ton/year polyethylene plant, contracted by Huanqiu Contracting & Engineering Corporation, has successfully started operations and produced qualified products. The project, a key Sino-German cooperation initiative witnessed by both countries’ premiers, is BASF’s largest overseas investment to date. Located in Zhanjiang’s Donghai Island Petrochemical Industrial Park, the plant adheres to global construction standards and will boost high-end polyolefin supply in South China. Part of BASF’s 10-billion-euro Zhanjiang Verbund site, it features a 1-million-ton/year ethylene cracker and downstream units serving auto, construction, electronics and food packaging sectors. The plant was signed in December 2022, completed mechanically in September 2025, and entered commissioning shortly after.
Jiangsu Province has launched a new “negative list” for industrial restructuring, the first of its kind in the province’s industrial sector. The policy targets high-energy-consuming and backward production capacity across 17 industries, with 155 restricted and 420 eliminated items (283 processes/equipment, 137 products). Restricted projects may undergo technological upgrading or relocation, while eliminated ones face phased shutdowns. Higher-than-national energy consumption quotas, which will be dynamically adjusted, aim to improve resource efficiency.
China’s PP/PE industry is set for a capacity boom in 2026, with 5.12 million tons of new polyethylene and 3.78 million tons of new polypropylene capacity planned, according to Guanyan Tianxia. Another industry report forecasts polypropylene capacity growth could reach 5.65 million tons, pushing total output above 50 million tons. Most new capacity will come online in the second half of the year. Key projects include PetroChina Dalian Petrochemical’s 68.5-billion-yuan Xizhongdao refining and chemical complex, set to break ground in 2026. The relocation project will include 400,000-ton/year polypropylene, 900,000-ton/year full-density polyethylene and 300,000-ton/year low-density polyethylene units, alongside 10-million-ton/year refining and 1.2-million-ton/year ethylene facilities.
Industry analysts note that while capacity expansion will drive output growth, it may intensify market competition. Long-term growth will be supported by raw material diversification, green transition and high-end capacity upgrades. China’s polypropylene capacity is expected to add over 23 million tons in five years, lifting self-sufficiency and cutting import dependence to below 15% by 2030.
Post time: Jan-22-2026